Over the past 12 months, the CMA has paid close attention to the Package travel sector; raising particular concerns around the cancellation of Package bookings and the subsequent availability of refunds.
Indeed, the CMA first published an open letter to the Package travel sector in July 2020, summarising the complaints that it had received in this area and the actions it expected travel companies to take, to ensure compliance with the law.
The CMA’s focus on the travel industry has not waned in the intervening period and the CMA has now followed up with a second open letter to the Package travel sector.
The second letter effectively acts as a restating of the CMA’s views on various areas of complaint that it has received from consumers, in relation to the Package travel sector. The CMA notes that it has received over 23,000 Package related complaints since the start of the pandemic (interestingly, this figure stood at 17,500, in the July 2020 letter, suggesting that the volume of complaints has slowed considerably over the past 10 months) and uses the letter to emphasise its position on a number of common concerns that have arisen; such as the availability of refunds, the speed at which refunds are provided and practices around refund credit notes.
While much of this is not new information, there are two issues raised in the letter that are worth particular attention:
The first is that the CMA has raised concerns with the use of “refund guarantees”; where package organisers include existing consumer rights as part of a ‘guarantee’ to their customers. For instance, a package organiser may state that they “guarantee” a refund will be paid within 14 days, in the event a holiday is cancelled.
The CMA notes that the act of presenting an existing legal right as an additional guarantee or distinctive feature of a trader’s offer is likely to be unlawful.
Therefore, if a refund guarantee is to be offered, it should be limited to cover features or offers that are additional to a customer’s existing legal rights.
Secondly, the CMA has confirmed that it continues to view FCDO advice against travel (or all but essential travel) to a destination as compelling evidence of the existence of unavoidable and extraordinary circumstances occurring at the holiday destination and so triggering the customer’s right to cancel and receive a refund, under the Package Travel Regulations.
That said, the CMA has offered additional commentary on this point and has addressed the question of what it believes Package organisers should do, if they decide not to cancel due to the existence of such FCDO advice.
To this end, the CMA states that it would expect the Package organiser to explain fully the basis upon which they have refused to cancel and provide a refund; and to provide detailed information about the evidence on which they have relied in reaching that assessment and has stated that if a package organiser decides to refuse to cancel a Package, despite FCDO advice against travel to the destination.